A Simple Probabilistic Approach of the Yard-Sale Model

Christophe Chorro ()
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Christophe Chorro: Centre d'Economie de la Sorbonne, https://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: We propose in the present paper a probabilistic approach of the so-called Hayes (2002) Yard-Sale model using classical diffusion approximations of Markov chains. We partly recover, at the very least for small and high frequency transactions, recent results of Boghosian (2014) and Boghosian et al. (2015) concerning both wealth condensation in the absence of redistribution mechanisms and steady state distributions when a uniform capital taxation is imposed

Keywords: Wealth distribution; Yard-Sale model; Diffusion approximations; Impact of taxation (search for similar items in EconPapers)
JEL-codes: C32 C63 D31 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2015-07
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Published in Statistics & Probability Letters, Elsevier, vol 112, May 2016, pages 35-40

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https://www.sciencedirect.com/science/article/pii/S0167715216000080

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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:15062

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